Richter Department Stores, Inc. has three departments: women’s, men’s, and children’s. The following are the indirect costs related to its operations: 

Medical insurance 

Salaries of secretaries 

Water bill 

Vacation pay 

Sewer bill Staples 

Natural gas bill 

Pens 

Ink cartridges 

Payroll taxes 

Paper rolls for cash registers 

Required

a. Organize the costs in the following three pools: indirect materials, indirect labor, and indirect utilities, assuming that each department is a cost object.

b. Identify an appropriate cost driver for each pool.

c. Explain why accountants use cost pools.